Indemnification: Microsoft claims questioned

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First it was the security war, with Microsoft and sponsored
studies claiming Windows is more secure than Linux; Linux vendors
came back with the exact opposite claim.

Now it has spread to indemnification. Melbourne open source firm
Cybersource says it has studied Microsoft's recent
statements about indemnification, and claims that the legal
indemnification offered by the software giant is no better - and
sometimes worse - than that offered by Linux vendors.

Con Zymaris, a prominent open source activist and chief
executive officer of said Melbourne firm, said that according to published
information, the indemnification offered by Microsoft gave
limited or no protection to most of its customers.

"What Microsoft doesn't tell you is that the great majority of
their own customers are not covered by any indemnification
whatsoever," said Zymaris. "A careful read through the standard
Microsoft End User License Agreement (EULA) shows very clearly that
users can expect no real legal protection from Microsoft.

"In other words, Microsoft's sole financial responsibility to
you, if their software causes you any loss, is to either refund
your payment for the software, or repair/replace the product media
or packaging. You have no other legal recourse. Indemnification of
users is not even mentioned in this EULA."

Zymaris also claimed that the EULA went further, and excluded
indemnification of customers. "Microsoft disclaims that their
software will not infringe on the intellectual property rights of
others and absolves itself from any potential damages, to the
fullest extent possible," he said.

"Only the tiny minority of Microsoft customers who have signed
volume licensing contracts have any recourse to some legal
protection. So, even though all Microsoft customers pay handsomely
for Microsoft's products, most are not legally covered at all. This
is no different to the standard legal protection offered by Linux
and open source software, which users obtain free!"

Zymaris said Linux users who required indemnification could
purchase products from vendors rather than download it free.

"Most importantly, Microsoft's concept of indemnification and
warranty is exceptionally narrow. Microsoft does not warrant its
software against damage that may arise from malfunction, nor does
it indemnify or warrant customers against viruses, worms and loss
of business that ensues from downtime, much of which are a direct
result of Microsoft's own design and coding practices," he said.
"Microsoft customers are not afforded legal recourse against
Microsoft for the vast majority of actionable items, so Microsoft's
claims of legal coverage for its customers, are an illusion."

He cited the case which software developer Timeline filed
against Microsoft, claiming that the latter had used Timeline's
technology in its SQL Server product. Timeline won the case, and
then went after
one of Microspft's customers, Cognos. This case was settled out of
court, with Timeline being paid $US1.75 million.